CASE 1 SA Construction Limited currently operates in Trinidad. The company is considering setting up another location in
Posted: Wed May 04, 2022 7:21 am
CASE 1 SA Construction Limited currently operates in Trinidad.
The company is considering setting up another location in either
Barbados or Jamaica. The Projected Income Statement for 2023 is as
follows: USD Income Sales 90,000 Interest Income 2,500 Dividend
Income 6,000 Other Income (exempt) 2,000 Expenses Depreciation
20,000 Interest Expenses (1) 7,000 Repairs & Maintenance 1,500
Legal & professional fees (2) 8,000 Salaries 30,000 Bad debts
(3) 3,000 Other Expenses (4) 20,000 Taxation 2,250 Notes 1. All
Interest was paid. There was no accrued interest at year end. 2.
Professional fees consist of: • Audit and accountancy fees $3,600 •
Legal fees re collection of bad debts $2,000 • Cost of setting up
business in the selected location $900 • Architect’s fee for
designing a warehouse that has not yet been constructed $1,500 3.
The Bad Debts expense represents a debt which was outstanding for
270 days. 4. Other expenses include $1,000 for expenses paid on
behalf of another company owned by SA Construction Limited, $600
for fines and penalties, $1,500 for course fees of the directors,
and expenses relating to exempt income. 5. Capital Allowances of
$15,000 was projected. 6. Estimated Tax of $700 was paid to the
relevant Tax Authority. 7. Assume Exchange Rates: J$ 150: 1 USD and
TT$ 6 :1 USD Required Part A i. From a corporate tax perspective,
in which country would it be more tax beneficial to operate? Ignore
Employment Tax Credits, Corporate tax Credits available in Jamaica
and other similar credits in Barbados) (6 marks). ii. Explain two
main reasons why expenses may not be deductible for income
tax/corporation tax purposes. (4 marks) iii. What other factors, if
any, should be considered when setting up operations in these
countries? (2 marks) iv. Discuss the two (2) other taxes that
should be considered when setting up operations in either Jamaica
or Trinidad. (4 marks) (answer for one country only) v. Identify
two (2) documents that must accompany the Corporation Tax return
when it is filed. (2 marks)
The company is considering setting up another location in either
Barbados or Jamaica. The Projected Income Statement for 2023 is as
follows: USD Income Sales 90,000 Interest Income 2,500 Dividend
Income 6,000 Other Income (exempt) 2,000 Expenses Depreciation
20,000 Interest Expenses (1) 7,000 Repairs & Maintenance 1,500
Legal & professional fees (2) 8,000 Salaries 30,000 Bad debts
(3) 3,000 Other Expenses (4) 20,000 Taxation 2,250 Notes 1. All
Interest was paid. There was no accrued interest at year end. 2.
Professional fees consist of: • Audit and accountancy fees $3,600 •
Legal fees re collection of bad debts $2,000 • Cost of setting up
business in the selected location $900 • Architect’s fee for
designing a warehouse that has not yet been constructed $1,500 3.
The Bad Debts expense represents a debt which was outstanding for
270 days. 4. Other expenses include $1,000 for expenses paid on
behalf of another company owned by SA Construction Limited, $600
for fines and penalties, $1,500 for course fees of the directors,
and expenses relating to exempt income. 5. Capital Allowances of
$15,000 was projected. 6. Estimated Tax of $700 was paid to the
relevant Tax Authority. 7. Assume Exchange Rates: J$ 150: 1 USD and
TT$ 6 :1 USD Required Part A i. From a corporate tax perspective,
in which country would it be more tax beneficial to operate? Ignore
Employment Tax Credits, Corporate tax Credits available in Jamaica
and other similar credits in Barbados) (6 marks). ii. Explain two
main reasons why expenses may not be deductible for income
tax/corporation tax purposes. (4 marks) iii. What other factors, if
any, should be considered when setting up operations in these
countries? (2 marks) iv. Discuss the two (2) other taxes that
should be considered when setting up operations in either Jamaica
or Trinidad. (4 marks) (answer for one country only) v. Identify
two (2) documents that must accompany the Corporation Tax return
when it is filed. (2 marks)